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Sustaining New Synergies Initiative. March 23, 2010 • France A. Córdova. Commission for Higher Education Regional Campus Roles and Missions March 2010.

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slide1

Sustaining New Synergies Initiative

March 23, 2010 • France A. Córdova

slide2

Commission for Higher EducationRegional Campus Roles and MissionsMarch 2010

  • With increasing admissions standards at the Indiana University and Purdue University flagship campuses, and exploding enrollment at the community college level, Regional Campuses will play an increasingly important role in serving Hoosiers with high quality, low-cost baccalaureate degree programs, filling a vital niche in Indiana’s system of higher education.
  • Policy paper gives direction for a more efficient and effective role for campuses, as well as expectations.
slide3

Purdue University System Response

  • Agreement among Chancellors and Presidents on value of Purdue brand to campuses and value of campuses to Purdue WL:
    • Access
    • Success
    • Demographics
    • Public support
    • Legislative support
    • Workforce development
    • Economic development
slide4

Purdue University System Response

  • Campuses agree to work more in concert with each other and with WL (“Northern Corridor Consortium”)
    • Educational opportunity (e.g., shared core curriculum for ease of transfer)
    • Technical workforce development (with Ivy Tech and Purdue extension)
    • Economic development (utilizing technology centers, certification programs)
  • Press release about concerted effort among the Purdue campuses to grow the economy of Northern Indiana (announced upon approval of ICHE’s white paper on campuses, 3/12/10)
slide5

Regional Campus Concerns

  • Budget environment and its potential impact on the campus (e.g., Governor’s recent cut)
  • Compensation/Benefits
  • Communication between regional campuses and WL campus (home of system administration)
slide6

Sustaining New Synergies Initiative

March 23, 2010 • A.V. Diaz

slide7

Governor’s Challenge

  • Governor’s cut of $150 M from Indiana public higher education institutions
  • $45.5 M from Purdue system-wide(6% of overall appropriation)
  • Distribution (percent of appropriation)
    • 6.7% West Lafayette
    • 6.1% Calumet
    • 3.5% IPFW
    • 0.4% North Central
    • 6.0% Other Line Items
slide8

Strategies to Achieve Savings

  • Strategic Sourcing
  • Energy Conservation
  • Information Technology
  • Workforce and Compensation Adjustments
    • Administrative Assessments
  • http://www.purdue.edu/sustaining/
slide9

Workforce and Compensation Assessments

  • Retirement contribution
  • Health care program
  • Overtime policy
  • Early retirement incentive
  • Benefits for part-time employees
  • Furlough process
slide10

Retirement Contributions

*Voluntary 2:1 match until age 35

slide11

Regional Faculty and Staff Salary Comparisons

Data Source:Office of Institutional ResearchJuly 8, 2009

slide12

Trustees’ Position

  • Current university retirement contribution is unsustainable, must be reduced to peer benchmark: 10% employer contribution and, ideally, 5% employee contribution. (Saves $13 M/year on WL campus alone.)
  • Can do this for new employees and be in line with peers.
  • Challenge: Continuing employees value retirement contribution. Yet, in general, salaries are too low compared to peers. Hurts recruitment, national position.
  • Variety of options include:
    • Trustees’ option: Create 3% merit pool from benefits savings (save remainder for next budget cut)
    • WL administration option: “Rebalance” to increase salaries, and provide flexibility for employee spending or employee contribution to retirement
slide13

Benefits of Rebalancing

  • Benefit to the University
  • More sustainable model
  • More competitive salaries
  • Improved recruiting opportunities
  • Benefit to the employee
  • Provides flexibility
  • Provides income opportunity

The level of total compensation remains the same.

slide15

Annual Tax Implications of Rebalancing*†

*Based on 30% marginal rate

†TIAA-CREF eligible employees only

slide16

Decision Timeline

  • April 8-9
  • May 27-28
  • Present balanced operating budget plan for FY 2011 to Board of Trustees
  • SNS proposal will be presented as an information item
  • Report results of compensation assessments and present implementation plans for SNS initiatives to Board of Trustees
  • Trustees will vote on proposal